AI transcript
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– Scott, you recently wrote a post on your blog
No Mercy No Malice about the energy industry
and your predictions for what is going to happen
in terms of our energy consumption
and global energy demand.
Could you summarize what your thoughts are there?
– We always find a way to put energy to work.
And I think that essentially when you look at
the problems around carbon and global warming,
and then you couple that with so many nations developing
who are producing hundreds of millions of people
coming into the middle class,
and what happens when you come into the middle class?
You start getting a car,
your energy consumption goes up,
you start eating more beef.
All of these things that require a ton more energy.
The demand here isn’t satiable.
And so people who come up with whether it’s nuclear
or some sort of different renewable
or near self propulsion machines in the ocean,
whatever it is, that is gonna create a lot of billionaires
and maybe our first trillionaire.
(upbeat music)
– Welcome to First Time Founders.
Here’s a stat I learned recently.
A chat GPT request consumes 10 times more energy
than a Google search.
We’re in the early innings,
but AI is already using up more power than small nations
and that consumption is expected to triple
by the end of the decade,
which leaves us with an existential question
for our planet.
How are we going to keep the lights on?
My next guest is a pioneer in energy,
specifically energy storage.
After designing batteries for Elon Musk
as Tesla’s director of energy,
he decided to start his own company
to help us store energy cheaper and for longer.
Over six years, he raised $900 million in funding,
built a 1 million square foot battery factory
in West Virginia and will soon deploy
the biggest battery ever created.
There are a few individuals alive today
who have had a bigger impact on the energy industry
and its future.
This is my conversation with Matteo Haramio,
CEO and founder of FormEnergy.
Good to see you Matteo.
– Good to see you Ed, nice to be here.
– Let’s get right into it
’cause I know that you don’t have all the time in the world.
So, we’ve been discussing energy a lot
on this podcast recently, more than usual,
and it’s been coming up a lot mostly because of AI.
Just a couple of stats that really grabbed our attention.
One is that energy demand for AI
is currently doubling every hundred days.
And two, partly as a result,
the total amount of energy consumed by data centers
is expected to triple in the next six years.
And for context, that would be enough energy
to power 40 million homes in America.
Now, I know there’s a lot more
to the energy conversation than AI,
but I would say that the key takeaway that we’re learning
is that basically in the next few years,
we’re gonna need a ton more energy,
far more than we produce today,
and we’re gonna need new innovative solutions
to generate, store, and distribute that energy,
which is exactly what you are doing
with your company, FormEnergy.
I’d like to start with some very basic stuff
before we get into you and Form.
Your mission is to, quote, transform the grid.
I hear that term a lot, the grid,
the electric grid, the power grid.
What actually is the grid?
The grid is perhaps the most complex machine
that humans have ever made, and also the largest.
In many ways, think of it as a single integrated entity
by continent, more or less,
where we are simultaneously producing
and consuming a commodity at the same time.
And in the case of the electric grid,
that is, of course, electricity.
And today, that’s happening on every continent
in slightly different ways,
but largely what we do is we generate electricity
in one location, and we move it to where it’s needed,
where the demand is, where what we call the load sits.
And so we have this reconciliation that’s happening
on a sub-second basis, in fact,
micro-second basis for production
and consumption of a good.
So that’s what we’re talking about when we say the grid.
It’s basically the electric system, the production,
the, or generation, as we say, the transmission,
the distribution, and then the consumption.
But you are an innovator in storage,
and I don’t think you mentioned that word
when you described the grid there.
I don’t think a lot of people understand or appreciate
what a significant industry that is,
let alone realize that it actually exists.
Give us a rundown on energy storage.
What is it?
What are the different types?
How does it play into this complex system
which you described, which is the grid?
– Yeah, and part of the reason I didn’t mention it
is because one of the reasons why the electric grid
is so impressive as a feat of engineering
is because it doesn’t use a lot of storage, in fact.
It’s sort of counterintuitive, at least not in the,
from the generation to the consumption side of things.
Think about any other very large industry.
It could be retail, refrigerated goods.
It could be data.
We have data warehouses.
It could be, you name it, there is a version of inventory
that sits somewhere between production and consumption
because it’s a natural thing to do, right?
That’s how we sort of move things around
and become efficient at that.
Whereas on the electric grid,
we’re doing all of that in real time, right?
Generation and consumption.
There’s upstream versions of storage.
We have liquid fuels or we have coal
or we have these kinds of things.
But in between the generation and consumption,
we don’t have a lot of storage.
So this is a growing area
because there is a growing need for storage
because now we have different kinds of generation.
We do not have those fuels in many cases
to just store and have sit around until we need them.
Yes, we still, of course, do some of that,
but increasingly in very large volumes,
the lowest cost version of electricity is the renewables.
And these are, by definition, weather driven renewables
and therefore intermittent, right?
They go away and they come back.
And so we need to think about the storage
that we need to reconcile these generation resources
at the scale that is really impacting
the entire electric system.
Now there has been electric storage on the grid
from the beginning because people did realize
some of this is a challenge and primarily it was water.
So you sort of had water up on a hill, more or less,
and you would run it through a turbine
going down the hill to generate electricity.
And then during periods of low cost,
you would pump it back up the hill.
And so that’s been sort of a known way
to use energy storage for a very long time.
And of course, we rely on nature’s natural mechanism
for that, which is snow in the mountains,
which very helpfully melts during the other half of the year
and sends water downstream that we sort of capture,
which we then put to productive use.
And so the question now is,
how do we bring more types of energy storage
onto the grid cost effectively and at scale,
such that we can incorporate even more
of these low cost, renewable,
but intermittent sources of electricity.
– So it sounds like then coal, oil,
those are both energy producers
and examples of energy storage.
That would be right.
– Exactly, in some ways, yes.
And I mentioned the use of energy storage
paired with renewables,
but in fact, they can also be very effectively paired
with those conventional resources as well.
So I mentioned sort of intermittent weather,
sun going down, some coming back,
but we also live in increasingly volatile weather environment
where we have these storms, extreme heat or extreme cold.
And that is also stressing the way
that we have generated electricity for a very long time.
So look at the winter storm, Yuri,
which was this storm that happened a few years back in Texas
and cost $60 billion worth of damage,
you know, this sort of unprecedented freeze
in the middle of February in Texas, right?
And one of the major reasons why the blackout lasted
as long as it did and was so impactful
was because the natural gas resources
were frozen in place more or less.
In other words, you couldn’t access the stored energy, right?
And so that’s another way that we’re looking to say,
well, what is a non-correlated way to store this energy
in such a way that we have just a really reliable,
robust system overall?
Because increasingly,
I’m sure we’ll talk about this on the AI front,
increasingly electricity is a requirement
to operate the modern society.
There’s a woman who runs a utility
called Portland Gas and Electric Maria Pope
and she’s a leader in the industry
and she’s fond of saying that electricity
may only be 2% of GDP in the United States,
but it’s the first 2%.
And, you know, everything else sort of relies on that 2%.
And so having different kinds of energy sort of show up
in ways that hasn’t been required to previously
becomes a really interesting and compelling
and fun, frankly, aspect of sort of where we are
in the electricity industry.
– So it’s almost like, I mean, just to put it very simply,
you know, wind turbine is generating the energy
from the wind, but it’s not necessarily storing it.
And as we increasingly rely on renewables,
we’re gonna need more ways to store that energy
in a way that, and I love that point you made that,
you know, the freezing weather conditions,
we couldn’t even access those more traditional forms
of energy storage, which brings us to batteries.
I think some people, maybe not everyone,
has heard of the lithium-ion battery.
I feel like there’s been this increased interest in lithium.
That’s what I understand to be the,
what do we wanna call it, blue chip battery
that we have been using for energy storage for however long.
You have a different battery called the iron-air battery.
What’s the difference between this traditional battery
we’ve been using for the past however many decades,
I actually don’t know, versus your battery,
the iron-air battery?
– Yeah, so lithium-ion has been around for some time.
It was sort of first discovered in the late ’70s, early ’80s.
There’s different variants of that battery.
So lithium-ion covers a class of different kinds
of those batteries.
And it was commercialized in the ’80s for camcorders.
So pre-cell phone, of course,
you had to have a dedicated device,
which was a shoulder-mounted camera,
you know, this huge bulky thing,
but was an enormous success commercially
because for the first time you were untethered,
you don’t have to keep this thing plugged in,
and you could walk around, you know,
your kid’s baseball game or a wedding or whatever it was,
and, you know, take video footage.
That’s why lithium-ion was commercialized.
And lithium-ion is a wonderful chemistry,
principally because of density.
So you can cram a lot of energy
in a very small amount of volume,
and it doesn’t weigh very much.
And so it enabled all these subsequent
consumer electronics applications,
the ones that we sort of take for granted today,
laptops and, you know, phones that fit in our pockets,
and they are literally right next to our existence.
We’re so reliant on them.
And so it’s no surprise that we’re also using
a lot of lithium-ion batteries for the electric grid
because it’s a proven technology.
It’s now being made at massive scale,
especially thanks to the automotive industry,
which is driving that scale and cost down.
And largely what they’re doing is helping to meet the peak
of the electric grid.
So think about the patterns of electricity consumption
that happened throughout the day.
They follow the patterns of human existence, right?
So very quiet at night,
and then they ramp up during the day,
and there’s a peak that you see,
which happens in the middle of the day,
when sort of activities at its greatest,
and then it comes down over the course of the night
and sort of goes to bed, if you will.
And historically, we’ve used coal or natural gas
or hydro to sort of match the cycles.
We turn things on and off or ramp them up or down,
and batteries being wonderful coming on
when we need them and going off when we don’t need them.
That’s the very first application for lithium-ion
on the grid as well, is to meet those peaks,
those relatively short duration peaks
that we have as an electric system.
Because again, we need to reconcile all of this
in real time, right?
Let’s use it or lose electricity.
And so having these batteries show up
instantaneously and provide that power
exactly when we need it for a few hours,
and then go away, that that’s a very helpful function
for electric storage.
One key feature of lithium-ion, or any direct battery really,
is that duration goes hand in hand with cost.
In other words, you can’t really separate
how long you discharge it from how much it costs to do that.
Because it all comes down to that.
And lithium-ion is great from an energy density standpoint
and from a cycle standpoint.
You can charge and recharge it many thousands of times now.
It is not so great, comparatively speaking,
from a cost standpoint.
And so for the purposes of the electric grid anyway,
phones and laptops and cars are quite different.
But from the electric grid standpoint,
it’s cost effective to only discharge it
for a few hours at a time.
In other words, generally between two
and four hours duration.
Anything longer than that,
it’s really just not cost competitive.
And so think about the landscape of the electric grid.
We have to solve all of the challenges of intermittency,
not just a few hours at a time.
We’ve got to solve for seasonal imbalances.
We have to solve for extreme weather
that sits around for a week or for four days
or whatever it might be.
And so to solve those problems,
we need to start to look to other types of energy storage
that really can be cost effective
over those much longer durations
than just a couple of hours at a time.
– Which brings us pretty nicely to the iron-air battery,
which from my understanding,
it lost several days in comparison.
– One of the reasons why we liked this technology
was it had been demonstrated.
You can rust and unrust iron reliably many times,
but it had never been commercialized
because it didn’t have a killer app.
It was first investigated in the 1970s in the United States
under actually a grant from the U.S. Department of Energy
to Westinghouse, which was one of the main electric entities
at the time, as well as a Swedish national lab
right around that same time as well.
But when they sort of dug into it,
iron-air batteries are not very suitable for vehicles
or for consumer electronics or for anything else, frankly.
And so it sat on the shelf relatively speaking
for about 50 years.
And when we were starting form about seven years ago,
we went looking for things that did exist,
but which had never been commercialized.
And we saw iron-air and we said,
this looks like now there is a killer app.
And that killer app is on the grid
for much longer duration
than any of the other technologies can go after.
And it’s, again, because of the cost, right?
If we need a certain duration to be much longer
to bridge those multiple days of interment,
say that we face where the weather volatility,
broadly speaking, then we have to come in
at a much lower cost to get that much longer duration, right?
That’s sort of the inevitable trade that you make.
And so that’s what we sort of picked up off the shelf
and dusted off and said,
now let’s apply 50 years of human knowledge
in electrochemistry, right?
Battery development, corrosion science,
knowledge of iron, right?
All these things and go commercialize that battery.
Not just prove that the science works,
but build a device at Scalva Manufacturing Facility
and keep the cost entitlement where it is
and drive performance further
than even what they thought they could get 50 years ago.
And so that’s what we’ve been doing.
That’s been the work of the company
is to really drive this commercialization of iron air
as a chemistry into the world for the first time.
– What has the demand for these batteries
looked like in the past couple of years?
It appears, I mean, especially based on the amount of funding
that you’ve secured that there is already
a serious need for these.
Is that what you’re experiencing on the sales end?
– Yeah, absolutely, and of course,
the picture changes quickly, relatively speaking.
So when we started the company, we said,
we’re gonna build a 100 hour battery
that’s one-tenth the cost of living mind.
And people said, a lot of people said,
oh, well, that’s not gonna be relevant for 20 or 30 years.
Good luck, right?
It’s gonna take forever for a market
to show up for that kind of thing.
And what very clearly fell out of that really detailed
analysis that we ended up doing with utilities, by the way,
was if you can have a 100 hour battery at the cost point,
’cause those two things go together,
then you drive a whole new asset class
on the electric system,
and there’s a huge amount of value right now.
You don’t have to wait 20 or 30 years.
You can address pockets of that intermentancy
or reliability challenges or whatever else
they might be right now,
because it’s just another cost-effective asset.
Doesn’t even really matter.
And so that came out very, very clearly.
And we started working with these utilities.
So our customers are those utilities, right?
If you’re a customer of a utility,
it’s probably the name of the utility
that you send a bill to every month.
These are, this is Excel Energy in Colorado and Minnesota
or Georgia Power in the state of Georgia
or Pacific Gas and Electric, PG&E in California,
Dominion in Virginia, these kinds of entities
that are under the way the United States operates
these things, they’re essentially regulated monopolies.
So they have a natural monopoly, right?
They run the wires.
You’re not gonna have two companies
running wires to your house to compete.
So if you have blackouts, it’s their problem, right?
They’re their operator,
they’re responsible for it fundamentally,
and they have to keep costs under control, right?
It’s gotta be safe.
And increasingly, it has to be decarbonized.
And so this is sort of the challenge
of the last 10 years of the utility industry
is to figure out how to solve all of that
and now add on top of it, load growth,
which is another new challenge, relatively new challenge
that the industry is facing,
which it hasn’t had to face for the last 20 or 30 years,
right, load growth, right?
The amount of new demand for electricity
has been flat for the last 20 or 30 years.
Before that, it did grow very quickly.
We electrified the whole country in the United States
basically from zero, not basically from zero in the 1920s,
all the way to sort of the 1970s,
there was very quick load growth
and then sort of, you know, evened off.
So we have built a lot of electricity
sort of system capacity historically,
but we haven’t had to do that for the last 23 years.
So load growth on top is a challenge
that maybe the electric industry is not used to meeting.
It’s something that they did mean in the past,
but it’s a brand new challenge.
And you mix it in with these other ones
of reliability and cost and decarbonization.
And now it’s just, you know,
an even more complex set of challenges
that the utility needs to solve.
And into that mix, we’re introducing a new asset,
a new resource, right, a new tool, if you will,
for them to solve all these problems simultaneously.
– Yeah, I mean, this idea of energy consumption going up
and then being flat, and it’s just about to tick up again,
which I just find fascinating.
It seems like it’s just because of AI.
I did a little bit of research on this
in the past couple of weeks
and just sort of looked at per capita energy consumption
over the past 200 years, basically.
And it more or less is an exponential curve.
I mean, this is per capita.
It’s not that we have more people on earth.
People are consuming more energy.
Is that just going to continue into eternity?
Are humans just on a per capita basis
going to consume more and more and more?
– That’s a great question.
And part of the question is,
is that consumption being enabled by low costs, right?
You know, these things go hand in hand, right?
So if you build the highways wider,
do more people just show up, right?
‘Cause they want to use the resource.
But all of human, like modern human civilization
is based on low cost, abundant energy.
That’s sort of a fundamental of the civilization
that we live in today.
And where that energy comes from, the mix of it
has shifted over the last 200 years.
So initially, of course, that energy was wood.
We literally burned through forests of Europe
that are just now essentially growing back in many ways.
And so we started to do fuel switching.
So we went from wood to coal,
and then from coal to more hydropower,
and then ultimately to other sources of hydrocarbons.
And we’ve been reliant on the hydrocarbons
for the last 100 years,
maybe mixing in some nuclear in there fairly recently.
And then now we’re pulling in more renewables.
So you do see a fuel switching and the numbers going up
because costs continue to go down, right?
That is a feature of the energy in the industry
more broadly is that despite all of that growth,
despite all of that demand costs, in fact,
continue to go down on a real basis.
We’ll be right back.
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(upbeat music)
We’re back with First Time Founders.
I’d love to get an understanding
for how you arrived here,
and that is at Iron Air Battery Manufacturing,
one of the leading renewable energy storage
people in the world.
Just a little bit of your background.
You grew up in Salinas, California.
You went on to Harvard for undergrad.
You studied economics.
Then you made what I would consider
a very rare move in the world of tech,
which is you went to divinity school.
You went to Yale and you were studying
to become a theologian and from my understanding,
you wanted to be a priest.
Tell us about your childhood
and especially about that decision
to go to divinity school,
and perhaps how that may have translated
into your career in renewables.
– Yeah, so the town of Salinas,
where I grew up in California,
it’s an agricultural community.
So we go to lettuce, essentially.
That’s the primary good there.
And that community was totally transformed
when they figured out how to ship lettuce
from the west coast to the east coast.
In other words, refrigerated car,
or you wanna think about it, storage, right?
Energy storage.
And my parents were for public servants,
my dad a lawyer for farm workers,
my mom a teacher at public schools
for children of farm workers, essentially.
And so I saw also sort of the energy nexus, right?
The way that having access to low-cost energy
and that being a fundamental building block
of civilization,
how that intersects advantaged and disadvantaged communities
in some very important ways.
And so that has always been sort of a feature
of my thinking in general,
and went to Harvard and I studied energy economics largely.
And then I actually worked in the tech industry
for a few years after that.
This was the very first tech boom in Boston
in late ’90s, early 2000s,
and was largely disaffected with what I saw in that industry.
It seemed like it couldn’t be real,
and indeed that was the case.
And so I had a hunger to work on what I felt
to be more meaningful topics vocationally, professionally.
I like to work, I like to work hard.
I want that to mean something.
And so I also take my fifth seriously,
and I wanted to pursue sort of the intellectual aspects
of that and was open to becoming a ordained priest,
but found out very early on,
thanks to the curriculum at Yale,
that I’m wholly unfit to be a priest.
That should not be my job.
And so once I realized that that was just not gonna be
my vocation, I took those same skills
and tried to apply them to figure out
what did I want to do?
And energy, sort of having been a lifelong fascination
for me, I really sort of wanted to pursue that.
Now that’s a very broad topic,
and so I started to just do a lot of research,
and a lot of connections was one
of the wonderful parts of Harvard.
They used to have a book that you could literally open
and call people, alumni that were willing.
They were in the field of energy
that they were willing to take a call from.
– The manual LinkedIn.
– Exactly, I had to physically go to an office
to take down numbers and started to sort of piece together
a thesis, if you will, about what the energy landscape
was gonna look like, and even then,
you could see costs coming down on wind and solar.
They were very high compared to where they are today,
but the trend was definitely pointing
in the right direction and steep, right, steep down.
And so I sort of made a sector bet.
I basically just bet vocationally
that it would be an interesting field,
and it felt very relevant and needed
to have compelling types of energy storage
to take those renewable resources
that were coming down and cost so quickly.
Basically, I just said to myself,
I bet at some point batteries
will become relevant on the grid, and that’s what I did.
So I went to a company straight out of Divinity School
and we picked up my master’s in theology
and went to go work for a battery company,
and then that was in New York,
and then a few years after that,
I ended up at Tesla in 2009,
where I started what became the Tesla energy effort,
taking the lithium ion batteries out of the car,
and really, for the first time,
putting them on the electric grid.
– You worked closely with JB Straubel,
who was the co-founder of Tesla,
I believe you were working with Elon Musk too.
What were some of the learnings
from being on that rocket ship?
I mean, it sounds like,
I love you say you made the sector bet.
We often talk in this podcast about
riding the right wave,
picking the wave and then just riding through it.
You did that with that sector,
and you also did that with a company.
You went from a smallish startup
to one of the largest and most influential companies
in the world.
What was that experience like?
– Well, at the time in 2009,
it was definitely not one of the learnings,
in a most influential,
in fact, there was a Tesla death watch, right?
There was this website that was trying to predict
exactly when Tesla would fail,
because so many people were sure it was gonna fail.
So absolutely, it was a different moment for the company
and for the electric vehicle movement in general.
But it was, I could not think of a better place to go.
It was also that Tesla was like a shining light.
For folks who really wanted to work
on the hardest, most impactful problems,
Tesla just was like,
it was like moths to a flame for that place.
And so, Elon rightly deserves a lot of credit
for the vision that he set and the ambition of his goals,
which were just completely inspiring.
And the quality of the people that ended up showing up
is unparalleled, just spectacular.
And so, I got to work with JB
and I got to work with Elon and a bunch of other colleagues,
Drew, Beck Lino, and I could list many, many names there.
And some of the key learnings were go after hard problems,
you’ll get the best people to work on them, right?
It’s a little counterintuitive.
Like great people don’t want to work on mediocre challenges.
They want to work on hard problems.
They want to work on, in fact, the hardest problems.
And if you pick the right ones
and you set ambitious goals,
in some ways you end up with a self-fulfilling prophecy
on that in terms of the type of talent
you can bring into the company.
Now, getting high quality folks into the company
that’s step one, you’ve got to continue to motivate them
and drive them in the right way and everything else.
But absolutely, I saw that play out
to the company’s benefit time and time again
in those early days of Tesla.
As we went, from my time there,
from about 300 to 30,000 people, it was quite the sweep.
So that was certainly a key learning.
Go after the big stuff that matters, why not?
– But it wasn’t enough to keep you.
And then eventually you started your own company.
Why did you decide to do that?
– Well, as much as I saw that Lithium-Ine
very clearly back in 2009 when I joined Tesla
was going to be the next thing to come into the grid
in a meaningful way and have a big impact.
It also became clear over my time there
that Lithium-Ine was not the end all,
be all for energy storage on the grid.
And that was increasingly clear
as I talked to utility executives
while I was building up the Tesla energy business there.
They would describe these other challenges
that Lithium-Ine was just not gonna be able to meet.
Additionally, seven and a half years roughly
is enough time for me to spend at Tesla.
That’s a, you may have heard, it’s an intense place to work.
And so I love to work hard.
I love to work on what I feel matters.
And I’m also married and I got three kids.
And that was, I want to stay married
and be my kid’s life in the right way.
And so for me, that was enough.
And it was enough for me that it was enough.
I didn’t have to keep staying there.
And I also wanted to leave on good terms.
Everybody has a time at which it’s time
for them to leave Tesla.
And I saw a moment and I just said,
now’s a good time, right?
I did exactly what I wanted to do.
I started the Tesla energy effort and got it stood up.
And I’m super proud of the business that is today
and the role that I played early on.
It’s a great business.
And there were more things I still wanted to do,
specifically for energy storage,
precisely because I made a sector bet, not a company bet.
And so I saw more runway there and more opportunity
and frankly, more fun to go back to an earlier stage
and start something.
And I didn’t know that at the time when I left Tesla,
but that’s very quickly where my brain went to
’cause I’ve been in the industry 20 years now.
It turns out I’m not very good at thinking about much else
other than energy storage for the electric grid.
So it was sort of a natural inevitability, I suppose.
And I also should say that I had never founded anything
when I became a co-founder of Form and before.
I had started a company just on my own
that ended up merging to become Form.
But at the same time, I was 40 years old,
I also knew exactly what needed to be done.
And so, I had zero doubt.
I needed some encouragement from close friends
and more importantly, my wife to take that step.
You do have to sort of take that very first step
and say I’m gonna be a founder on something,
do the incorporation and push a board,
make the mental commitment to go do that.
But I also had, once I did take that step with that support,
I also knew exactly what needed to be done.
And I still feel that way.
I see very clearly the path in front of the company.
And that’s because I’ve been doing this for a long time
and I’ve seen good, I’ve seen bad,
I’ve seen different ways to do things.
And I think I’ve got a pretty good sense now
for what works, not just for the industry,
how to go build a business, energy storage specifically,
but also for how to build an organization.
– You mentioned that you were a co-founder
and that the company merged.
It’s a very interesting story.
I mean, the original company you created
was a different company called Verse Energy.
And then you ended up combining it
with what I would call a competitor.
I mean, it was this research team out of MIT,
headed by this guy, Yetmit Chang,
who’s now your chief science officer.
I believe his whole team is pretty much
on your founding team.
Why did you decide to combine with someone else,
specifically someone who was working on the same problems
and thus competing with you?
– Yeah, this was maybe a benefit of the age
that I was when I started it.
At some point, you realize that sublimating the ego
is in your own benefit.
And I’d been before Tesla,
I’d been at a failed battery company.
We basically didn’t do anything after working hard
for almost five years at that entity.
And I wanted to make sure we gave ourselves
every possible chance to succeed.
And that included having multiple technical shots on goal
and having people around the table
from the very beginning
that had been through this before.
And so not just yet,
but my other co-founders, Marco, Ted and Billy,
we’ve all been in batteries before.
This was nobody’s first time around the block.
And so having the collected decades of knowledge
and wisdom and hard earned scars
was just too compelling to pass up.
And we had more than one technical shot on goal.
I had identified iron arrow on my own,
but we didn’t know at the time
that that was gonna succeed at all, right?
And so in the world, starting at this stage
that we did of novel R&D
and early stage commercialization,
inevitably there are several cars that you turn over
that’s either say, says, or it’s zeros.
And we’re lucky enough that on iron air,
we turned over enough of those early on to say,
yeah, this is the one that’s gonna be,
but you just never know.
As a friend of mine says,
sometimes the universe works the way that you want it to,
but you don’t know that going in, right?
And so bringing five co-founders,
which is an unusually large number of co-founders
made complete sense to us at the time
because we all got along very well, it turns out.
And we’re all still in the company.
We’re all still pulling hard on the company.
It’s now a huge advantage.
We’re 750 people and we have five founders
throughout all parts of the company
that represent the founder mentality
that are completely committed to the success of this company.
And so I can’t imagine doing it any other way,
being a sole founder in this kind of enterprise.
It’s just, it’s really, really hard.
None of it has been easy.
We’ve benefited from a ton of really hard work
and super smart people and some luck along the way.
None of it easy or given, frankly.
And so any company is sort of imprinted by its founders.
And I can’t imagine a better set of four co-founders
to be with on this journey from the very beginning.
– Yeah, I’ve heard you say elsewhere
that you don’t consider yourself
one of these kind of charismatic salesman visionary,
what I would call, say like an Elon Musk, Steve Jobs type.
And I personally, I find that refreshing
and the way that you describe it,
it sounds like from the very beginning,
what you’ve been leaning on is your expertise.
I mean, from your entire career in the industry
plus teaming up with four other experts in this.
I like it because I feel like there’s just,
there are a lot of leaders in tech right now
who I would say lean on the vision
which can kind of delve into blind confidence.
Which I think we have enough of.
So I’m just interested as a leader,
who do you look up to?
What, who are sort of some of your leaders
that are your role models?
Who do you try to model your behavior off of as a manager?
– Well, first of all, I heartily agree with your sentiment
that we over index to sort of the megafauna CEO founder type.
And I think that there’s just too many other styles
of effective leadership to over index on just one.
And so the one that I bring to the table
is perhaps a little bit more understated to be clear.
What I don’t compromise on is standard of excellence
that we have internally.
And you can drive that in a lot of different ways
to be clear.
And it doesn’t have to be, again,
sort of this megafauna type personality
that’s just hammering people from the down.
We hold each other to very rigorous standards.
And if there’s one sort of management approach
that I take first and foremost,
it’s a very immodest hoarding of talent.
I will completely admit to that.
You need to go after the absolute best people
for absolutely everything you possibly can.
And then hold them accountable, right?
Set the right vision and hold them accountable.
But I also am not a micromanager,
much less as Elon would say, a nanomanager.
I really do want to hire those great people
and then empower them to go do their best possible work.
That understated style comes from my parents,
to be perfectly honest.
I saw them be leaders in their respective fields
using that approach.
And so there perhaps is also an echo,
just a little bit of one,
from the vocation of people who are ordained
in the ministry, in other words,
how do you lead a group with humility,
but still with vision, right?
And still with the driving force.
We’ll be right back.
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We’re back with first time founders.
When we last spoke, there was this one line
that you mentioned to me, which I love,
which you said sort of guides you.
It’s this passage from Proverbs, quote,
“People will perish for lack of vision.”
What does that mean to you?
You know, it’s a stark reminder.
That was written at a time
when people were living in the desert.
And literally, if they didn’t all agree on the vision,
they would die, right?
And the imperative of a clear vision
is as relevant for the group
of the 750 people inside of form
as it was for the people, the Hebrew people
that first wrote that down.
And the company will go away.
It will perish if we don’t have the right vision.
People can go take different jobs.
People can go decide to do something
different with their life.
And if we don’t give them the right vision
and let them know today why they’re working on the thing
that they’re working on
and why it matters in a broader context,
the company will perish.
It’s as simple as that.
And so it’s a stark reminder
of sort of the existential requirement, in fact,
especially if you’re starting something brand new
from scratch, creating a category inside of an industry
that’s relatively nascent, right?
Not to mention a company doing something new
to provide that vision
and to be very clear about why we’re here
and why this group of humans gets together
on a regular basis.
In fact, on a daily basis to work on a common goal.
It’s also a reminder to be humble
in service of that vision, right?
It is not about me.
It’s not about the management team.
It’s about the vision that we’re setting as a company
and the impact that we hope to go have.
It almost goes beyond just the company
because one thing we haven’t mentioned yet is climate.
And, you know, this was one of the main reasons
I assume that you started this.
I mean, much of the upside in your company
is that it will address climate change.
I and our batteries are a way to store energy
without relying on fossil fuels.
And the data is just getting bad and scary.
I mean, one start I pulled here
is that NASA confirmed that 2023 was the warmest year ever.
So, to what extent is the existential threat of climate
also a motivating factor?
In addition to the possibility that your company
as with any company could perish if sales drop off.
– Yeah, that’s a different sort of level
of thinking about perishing, that’s for sure.
But it’s a huge motivator to be clear
and it’s also tied to something I said earlier
which is that cheap abundant energy
underpins human civilization broadly speaking today.
And that fact is not going away.
And so we need to figure out how we will drive
the energy industry forward in a way that solves
for everybody, right, in the end.
And yes, it absolutely means meeting the climate challenges
that we have and the decarbonization challenges
that we have and still providing reliable
low cost abundant energy, no matter what.
And that is not a switch we can flip overnight.
It’s not, nobody has a wand to sort of make things better
immediately, it will take innovation
and it will take innovation at scale
and it will take massive amounts of capital.
I don’t know if you saw this, but roughly
between a hundred and 150 trillion dollars of capital
will go into this broad change that will happen
over the next 40 or 50 years.
It’s a little incredible, like literally incredible, right?
It’s hard to imagine.
And so we need to be able to meet the scale
of that challenge in a lot of different ways.
And absolutely we see that this kind of storage
can be a critical tool to enabling that change to happen
in a way that solves for a lot of people,
meets the climate goals, meets the energy goals,
meets the reliability goals, right,
that we have for this stuff.
And so it’s a huge motivating factor
in the broader context of just the scope
and scale of this industry, this energy industry
and within that the electricity industry
that we happen to work on.
– If there’s one thing that you think
regular people should know about
the state of our climate today.
I mean, I just mentioned last year was very warm,
but I feel like these stats often don’t ring true for people.
I think it’s hard to feel that impending doom.
And I think there’s a lot of psychological research
on that issue, but if there’s one thing
you think people should know about climate today
and where we’re at right now, what would it be?
– Well, I guess I’ll say two things.
One, the volatility of the weather is also increasing.
So that if you look at the incidents,
this is from the NOAA, the National Oceanic
and Administrative Entity that tracks these things.
If you look at the number of multi-day,
highly volatile weather events that are driving
essentially dollars of damage in the United States,
they’re going up pretty significantly.
They don’t have a pithy stat to sort of give to you,
but I’ve seen the chart and it’s definitely open
to the right there.
That’s important to keep in mind.
A changing climate, it means a lot of things.
However, we experience it as weather in the end, right?
And that weather will be more volatile for us.
We’ll have to sort of think about that.
And specifically for a lot of people,
it means water volatility, either too much or too little.
And what that means to civilization is quite important.
Now, the other part of that is,
it’s important to have a sense of agency in this
because sometimes $150 billion or two degrees Celsius
or any of these other things,
they’re sort of so abstract as to be unrelatable.
And I think it’s important to understand
the scope of the challenge.
It seems really, really big.
And remember that humans,
whenever we decide to do something,
we pretty much do it collectively.
Look at every sort of energy transition age
that we’ve been through.
I mentioned the fuel substitution.
That has happened.
We have done it.
We have been in periods before when we said
surely we’re gonna run out of energy.
Surely we can’t keep going in this way.
And you run the numbers in a linear fashion
and that’s all true.
And innovation steps in.
And human will to succeed steps in.
And we’ve seen that pattern over and over and over again.
And so I have a ton of faith based on the evidence
that I see that that will continue to be true
and that we collectively as a civilization
will step up and meet the needs.
And we’ll do that because people from all walks of life
in all ways that they intersect energy broadly speaking
will want that to be true.
– If you had one piece of advice
that you had to give to your former self
when you were starting the company, what would it be?
– Go do it.
I really didn’t know that I was gonna start a company.
And it took me some months to decide whether or not
I mentioned good advice from friends
and support from my wife that were critical to do it.
And it has been harder than expected
to be perfectly honest and more fulfilling at the same time.
And I think you just really never know going into it
what the journey is gonna look like.
And sometimes you just still need that encouragement.
And you sort of would like to ask your future self,
is this gonna be worth it?
And I think the answer unequivocally is yes,
and in different ways than you expect, right?
So go do it.
It’s not that much risk in the end, right?
I think collectively people are probably too risk-averse,
especially when it comes to their vocations.
I’m fortunate I come from a stable family
and they always support me and love me.
But even still, I think professionally,
people take far too few risks.
– Matteo Haramio is the founder and CEO of Form Energy.
Matteo, I would love to talk for hours more,
but I know you need to go build some iron-air batteries.
So we’ll let you go.
– Thanks very much, Eddie.
It was great to chat.
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Our associate producer is Allison Weiss.
And our engineer is Benjamin Spencer.
Jason Stavars and Catherine Dillon
are our executive producers.
Thank you for listening to First Time Founders
from the Vox Media Podcast Network.
Tune in tomorrow for Procure Markets.
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– Scott, you recently wrote a post on your blog
No Mercy No Malice about the energy industry
and your predictions for what is going to happen
in terms of our energy consumption
and global energy demand.
Could you summarize what your thoughts are there?
– We always find a way to put energy to work.
And I think that essentially when you look at
the problems around carbon and global warming,
and then you couple that with so many nations developing
who are producing hundreds of millions of people
coming into the middle class,
and what happens when you come into the middle class?
You start getting a car,
your energy consumption goes up,
you start eating more beef.
All of these things that require a ton more energy.
The demand here isn’t satiable.
And so people who come up with whether it’s nuclear
or some sort of different renewable
or near self propulsion machines in the ocean,
whatever it is, that is gonna create a lot of billionaires
and maybe our first trillionaire.
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– Welcome to First Time Founders.
Here’s a stat I learned recently.
A chat GPT request consumes 10 times more energy
than a Google search.
We’re in the early innings,
but AI is already using up more power than small nations
and that consumption is expected to triple
by the end of the decade,
which leaves us with an existential question
for our planet.
How are we going to keep the lights on?
My next guest is a pioneer in energy,
specifically energy storage.
After designing batteries for Elon Musk
as Tesla’s director of energy,
he decided to start his own company
to help us store energy cheaper and for longer.
Over six years, he raised $900 million in funding,
built a 1 million square foot battery factory
in West Virginia and will soon deploy
the biggest battery ever created.
There are a few individuals alive today
who have had a bigger impact on the energy industry
and its future.
This is my conversation with Matteo Haramio,
CEO and founder of FormEnergy.
Good to see you Matteo.
– Good to see you Ed, nice to be here.
– Let’s get right into it
’cause I know that you don’t have all the time in the world.
So, we’ve been discussing energy a lot
on this podcast recently, more than usual,
and it’s been coming up a lot mostly because of AI.
Just a couple of stats that really grabbed our attention.
One is that energy demand for AI
is currently doubling every hundred days.
And two, partly as a result,
the total amount of energy consumed by data centers
is expected to triple in the next six years.
And for context, that would be enough energy
to power 40 million homes in America.
Now, I know there’s a lot more
to the energy conversation than AI,
but I would say that the key takeaway that we’re learning
is that basically in the next few years,
we’re gonna need a ton more energy,
far more than we produce today,
and we’re gonna need new innovative solutions
to generate, store, and distribute that energy,
which is exactly what you are doing
with your company, FormEnergy.
I’d like to start with some very basic stuff
before we get into you and Form.
Your mission is to, quote, transform the grid.
I hear that term a lot, the grid,
the electric grid, the power grid.
What actually is the grid?
The grid is perhaps the most complex machine
that humans have ever made, and also the largest.
In many ways, think of it as a single integrated entity
by continent, more or less,
where we are simultaneously producing
and consuming a commodity at the same time.
And in the case of the electric grid,
that is, of course, electricity.
And today, that’s happening on every continent
in slightly different ways,
but largely what we do is we generate electricity
in one location, and we move it to where it’s needed,
where the demand is, where what we call the load sits.
And so we have this reconciliation that’s happening
on a sub-second basis, in fact,
micro-second basis for production
and consumption of a good.
So that’s what we’re talking about when we say the grid.
It’s basically the electric system, the production,
the, or generation, as we say, the transmission,
the distribution, and then the consumption.
But you are an innovator in storage,
and I don’t think you mentioned that word
when you described the grid there.
I don’t think a lot of people understand or appreciate
what a significant industry that is,
let alone realize that it actually exists.
Give us a rundown on energy storage.
What is it?
What are the different types?
How does it play into this complex system
which you described, which is the grid?
– Yeah, and part of the reason I didn’t mention it
is because one of the reasons why the electric grid
is so impressive as a feat of engineering
is because it doesn’t use a lot of storage, in fact.
It’s sort of counterintuitive, at least not in the,
from the generation to the consumption side of things.
Think about any other very large industry.
It could be retail, refrigerated goods.
It could be data.
We have data warehouses.
It could be, you name it, there is a version of inventory
that sits somewhere between production and consumption
because it’s a natural thing to do, right?
That’s how we sort of move things around
and become efficient at that.
Whereas on the electric grid,
we’re doing all of that in real time, right?
Generation and consumption.
There’s upstream versions of storage.
We have liquid fuels or we have coal
or we have these kinds of things.
But in between the generation and consumption,
we don’t have a lot of storage.
So this is a growing area
because there is a growing need for storage
because now we have different kinds of generation.
We do not have those fuels in many cases
to just store and have sit around until we need them.
Yes, we still, of course, do some of that,
but increasingly in very large volumes,
the lowest cost version of electricity is the renewables.
And these are, by definition, weather driven renewables
and therefore intermittent, right?
They go away and they come back.
And so we need to think about the storage
that we need to reconcile these generation resources
at the scale that is really impacting
the entire electric system.
Now there has been electric storage on the grid
from the beginning because people did realize
some of this is a challenge and primarily it was water.
So you sort of had water up on a hill, more or less,
and you would run it through a turbine
going down the hill to generate electricity.
And then during periods of low cost,
you would pump it back up the hill.
And so that’s been sort of a known way
to use energy storage for a very long time.
And of course, we rely on nature’s natural mechanism
for that, which is snow in the mountains,
which very helpfully melts during the other half of the year
and sends water downstream that we sort of capture,
which we then put to productive use.
And so the question now is,
how do we bring more types of energy storage
onto the grid cost effectively and at scale,
such that we can incorporate even more
of these low cost, renewable,
but intermittent sources of electricity.
– So it sounds like then coal, oil,
those are both energy producers
and examples of energy storage.
That would be right.
– Exactly, in some ways, yes.
And I mentioned the use of energy storage
paired with renewables,
but in fact, they can also be very effectively paired
with those conventional resources as well.
So I mentioned sort of intermittent weather,
sun going down, some coming back,
but we also live in increasingly volatile weather environment
where we have these storms, extreme heat or extreme cold.
And that is also stressing the way
that we have generated electricity for a very long time.
So look at the winter storm, Yuri,
which was this storm that happened a few years back in Texas
and cost $60 billion worth of damage,
you know, this sort of unprecedented freeze
in the middle of February in Texas, right?
And one of the major reasons why the blackout lasted
as long as it did and was so impactful
was because the natural gas resources
were frozen in place more or less.
In other words, you couldn’t access the stored energy, right?
And so that’s another way that we’re looking to say,
well, what is a non-correlated way to store this energy
in such a way that we have just a really reliable,
robust system overall?
Because increasingly,
I’m sure we’ll talk about this on the AI front,
increasingly electricity is a requirement
to operate the modern society.
There’s a woman who runs a utility
called Portland Gas and Electric Maria Pope
and she’s a leader in the industry
and she’s fond of saying that electricity
may only be 2% of GDP in the United States,
but it’s the first 2%.
And, you know, everything else sort of relies on that 2%.
And so having different kinds of energy sort of show up
in ways that hasn’t been required to previously
becomes a really interesting and compelling
and fun, frankly, aspect of sort of where we are
in the electricity industry.
– So it’s almost like, I mean, just to put it very simply,
you know, wind turbine is generating the energy
from the wind, but it’s not necessarily storing it.
And as we increasingly rely on renewables,
we’re gonna need more ways to store that energy
in a way that, and I love that point you made that,
you know, the freezing weather conditions,
we couldn’t even access those more traditional forms
of energy storage, which brings us to batteries.
I think some people, maybe not everyone,
has heard of the lithium-ion battery.
I feel like there’s been this increased interest in lithium.
That’s what I understand to be the,
what do we wanna call it, blue chip battery
that we have been using for energy storage for however long.
You have a different battery called the iron-air battery.
What’s the difference between this traditional battery
we’ve been using for the past however many decades,
I actually don’t know, versus your battery,
the iron-air battery?
– Yeah, so lithium-ion has been around for some time.
It was sort of first discovered in the late ’70s, early ’80s.
There’s different variants of that battery.
So lithium-ion covers a class of different kinds
of those batteries.
And it was commercialized in the ’80s for camcorders.
So pre-cell phone, of course,
you had to have a dedicated device,
which was a shoulder-mounted camera,
you know, this huge bulky thing,
but was an enormous success commercially
because for the first time you were untethered,
you don’t have to keep this thing plugged in,
and you could walk around, you know,
your kid’s baseball game or a wedding or whatever it was,
and, you know, take video footage.
That’s why lithium-ion was commercialized.
And lithium-ion is a wonderful chemistry,
principally because of density.
So you can cram a lot of energy
in a very small amount of volume,
and it doesn’t weigh very much.
And so it enabled all these subsequent
consumer electronics applications,
the ones that we sort of take for granted today,
laptops and, you know, phones that fit in our pockets,
and they are literally right next to our existence.
We’re so reliant on them.
And so it’s no surprise that we’re also using
a lot of lithium-ion batteries for the electric grid
because it’s a proven technology.
It’s now being made at massive scale,
especially thanks to the automotive industry,
which is driving that scale and cost down.
And largely what they’re doing is helping to meet the peak
of the electric grid.
So think about the patterns of electricity consumption
that happened throughout the day.
They follow the patterns of human existence, right?
So very quiet at night,
and then they ramp up during the day,
and there’s a peak that you see,
which happens in the middle of the day,
when sort of activities at its greatest,
and then it comes down over the course of the night
and sort of goes to bed, if you will.
And historically, we’ve used coal or natural gas
or hydro to sort of match the cycles.
We turn things on and off or ramp them up or down,
and batteries being wonderful coming on
when we need them and going off when we don’t need them.
That’s the very first application for lithium-ion
on the grid as well, is to meet those peaks,
those relatively short duration peaks
that we have as an electric system.
Because again, we need to reconcile all of this
in real time, right?
Let’s use it or lose electricity.
And so having these batteries show up
instantaneously and provide that power
exactly when we need it for a few hours,
and then go away, that that’s a very helpful function
for electric storage.
One key feature of lithium-ion, or any direct battery really,
is that duration goes hand in hand with cost.
In other words, you can’t really separate
how long you discharge it from how much it costs to do that.
Because it all comes down to that.
And lithium-ion is great from an energy density standpoint
and from a cycle standpoint.
You can charge and recharge it many thousands of times now.
It is not so great, comparatively speaking,
from a cost standpoint.
And so for the purposes of the electric grid anyway,
phones and laptops and cars are quite different.
But from the electric grid standpoint,
it’s cost effective to only discharge it
for a few hours at a time.
In other words, generally between two
and four hours duration.
Anything longer than that,
it’s really just not cost competitive.
And so think about the landscape of the electric grid.
We have to solve all of the challenges of intermittency,
not just a few hours at a time.
We’ve got to solve for seasonal imbalances.
We have to solve for extreme weather
that sits around for a week or for four days
or whatever it might be.
And so to solve those problems,
we need to start to look to other types of energy storage
that really can be cost effective
over those much longer durations
than just a couple of hours at a time.
– Which brings us pretty nicely to the iron-air battery,
which from my understanding,
it lost several days in comparison.
– One of the reasons why we liked this technology
was it had been demonstrated.
You can rust and unrust iron reliably many times,
but it had never been commercialized
because it didn’t have a killer app.
It was first investigated in the 1970s in the United States
under actually a grant from the U.S. Department of Energy
to Westinghouse, which was one of the main electric entities
at the time, as well as a Swedish national lab
right around that same time as well.
But when they sort of dug into it,
iron-air batteries are not very suitable for vehicles
or for consumer electronics or for anything else, frankly.
And so it sat on the shelf relatively speaking
for about 50 years.
And when we were starting form about seven years ago,
we went looking for things that did exist,
but which had never been commercialized.
And we saw iron-air and we said,
this looks like now there is a killer app.
And that killer app is on the grid
for much longer duration
than any of the other technologies can go after.
And it’s, again, because of the cost, right?
If we need a certain duration to be much longer
to bridge those multiple days of interment,
say that we face where the weather volatility,
broadly speaking, then we have to come in
at a much lower cost to get that much longer duration, right?
That’s sort of the inevitable trade that you make.
And so that’s what we sort of picked up off the shelf
and dusted off and said,
now let’s apply 50 years of human knowledge
in electrochemistry, right?
Battery development, corrosion science,
knowledge of iron, right?
All these things and go commercialize that battery.
Not just prove that the science works,
but build a device at Scalva Manufacturing Facility
and keep the cost entitlement where it is
and drive performance further
than even what they thought they could get 50 years ago.
And so that’s what we’ve been doing.
That’s been the work of the company
is to really drive this commercialization of iron air
as a chemistry into the world for the first time.
– What has the demand for these batteries
looked like in the past couple of years?
It appears, I mean, especially based on the amount of funding
that you’ve secured that there is already
a serious need for these.
Is that what you’re experiencing on the sales end?
– Yeah, absolutely, and of course,
the picture changes quickly, relatively speaking.
So when we started the company, we said,
we’re gonna build a 100 hour battery
that’s one-tenth the cost of living mind.
And people said, a lot of people said,
oh, well, that’s not gonna be relevant for 20 or 30 years.
Good luck, right?
It’s gonna take forever for a market
to show up for that kind of thing.
And what very clearly fell out of that really detailed
analysis that we ended up doing with utilities, by the way,
was if you can have a 100 hour battery at the cost point,
’cause those two things go together,
then you drive a whole new asset class
on the electric system,
and there’s a huge amount of value right now.
You don’t have to wait 20 or 30 years.
You can address pockets of that intermentancy
or reliability challenges or whatever else
they might be right now,
because it’s just another cost-effective asset.
Doesn’t even really matter.
And so that came out very, very clearly.
And we started working with these utilities.
So our customers are those utilities, right?
If you’re a customer of a utility,
it’s probably the name of the utility
that you send a bill to every month.
These are, this is Excel Energy in Colorado and Minnesota
or Georgia Power in the state of Georgia
or Pacific Gas and Electric, PG&E in California,
Dominion in Virginia, these kinds of entities
that are under the way the United States operates
these things, they’re essentially regulated monopolies.
So they have a natural monopoly, right?
They run the wires.
You’re not gonna have two companies
running wires to your house to compete.
So if you have blackouts, it’s their problem, right?
They’re their operator,
they’re responsible for it fundamentally,
and they have to keep costs under control, right?
It’s gotta be safe.
And increasingly, it has to be decarbonized.
And so this is sort of the challenge
of the last 10 years of the utility industry
is to figure out how to solve all of that
and now add on top of it, load growth,
which is another new challenge, relatively new challenge
that the industry is facing,
which it hasn’t had to face for the last 20 or 30 years,
right, load growth, right?
The amount of new demand for electricity
has been flat for the last 20 or 30 years.
Before that, it did grow very quickly.
We electrified the whole country in the United States
basically from zero, not basically from zero in the 1920s,
all the way to sort of the 1970s,
there was very quick load growth
and then sort of, you know, evened off.
So we have built a lot of electricity
sort of system capacity historically,
but we haven’t had to do that for the last 23 years.
So load growth on top is a challenge
that maybe the electric industry is not used to meeting.
It’s something that they did mean in the past,
but it’s a brand new challenge.
And you mix it in with these other ones
of reliability and cost and decarbonization.
And now it’s just, you know,
an even more complex set of challenges
that the utility needs to solve.
And into that mix, we’re introducing a new asset,
a new resource, right, a new tool, if you will,
for them to solve all these problems simultaneously.
– Yeah, I mean, this idea of energy consumption going up
and then being flat, and it’s just about to tick up again,
which I just find fascinating.
It seems like it’s just because of AI.
I did a little bit of research on this
in the past couple of weeks
and just sort of looked at per capita energy consumption
over the past 200 years, basically.
And it more or less is an exponential curve.
I mean, this is per capita.
It’s not that we have more people on earth.
People are consuming more energy.
Is that just going to continue into eternity?
Are humans just on a per capita basis
going to consume more and more and more?
– That’s a great question.
And part of the question is,
is that consumption being enabled by low costs, right?
You know, these things go hand in hand, right?
So if you build the highways wider,
do more people just show up, right?
‘Cause they want to use the resource.
But all of human, like modern human civilization
is based on low cost, abundant energy.
That’s sort of a fundamental of the civilization
that we live in today.
And where that energy comes from, the mix of it
has shifted over the last 200 years.
So initially, of course, that energy was wood.
We literally burned through forests of Europe
that are just now essentially growing back in many ways.
And so we started to do fuel switching.
So we went from wood to coal,
and then from coal to more hydropower,
and then ultimately to other sources of hydrocarbons.
And we’ve been reliant on the hydrocarbons
for the last 100 years,
maybe mixing in some nuclear in there fairly recently.
And then now we’re pulling in more renewables.
So you do see a fuel switching and the numbers going up
because costs continue to go down, right?
That is a feature of the energy in the industry
more broadly is that despite all of that growth,
despite all of that demand costs, in fact,
continue to go down on a real basis.
We’ll be right back.
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We’re back with First Time Founders.
I’d love to get an understanding
for how you arrived here,
and that is at Iron Air Battery Manufacturing,
one of the leading renewable energy storage
people in the world.
Just a little bit of your background.
You grew up in Salinas, California.
You went on to Harvard for undergrad.
You studied economics.
Then you made what I would consider
a very rare move in the world of tech,
which is you went to divinity school.
You went to Yale and you were studying
to become a theologian and from my understanding,
you wanted to be a priest.
Tell us about your childhood
and especially about that decision
to go to divinity school,
and perhaps how that may have translated
into your career in renewables.
– Yeah, so the town of Salinas,
where I grew up in California,
it’s an agricultural community.
So we go to lettuce, essentially.
That’s the primary good there.
And that community was totally transformed
when they figured out how to ship lettuce
from the west coast to the east coast.
In other words, refrigerated car,
or you wanna think about it, storage, right?
Energy storage.
And my parents were for public servants,
my dad a lawyer for farm workers,
my mom a teacher at public schools
for children of farm workers, essentially.
And so I saw also sort of the energy nexus, right?
The way that having access to low-cost energy
and that being a fundamental building block
of civilization,
how that intersects advantaged and disadvantaged communities
in some very important ways.
And so that has always been sort of a feature
of my thinking in general,
and went to Harvard and I studied energy economics largely.
And then I actually worked in the tech industry
for a few years after that.
This was the very first tech boom in Boston
in late ’90s, early 2000s,
and was largely disaffected with what I saw in that industry.
It seemed like it couldn’t be real,
and indeed that was the case.
And so I had a hunger to work on what I felt
to be more meaningful topics vocationally, professionally.
I like to work, I like to work hard.
I want that to mean something.
And so I also take my fifth seriously,
and I wanted to pursue sort of the intellectual aspects
of that and was open to becoming a ordained priest,
but found out very early on,
thanks to the curriculum at Yale,
that I’m wholly unfit to be a priest.
That should not be my job.
And so once I realized that that was just not gonna be
my vocation, I took those same skills
and tried to apply them to figure out
what did I want to do?
And energy, sort of having been a lifelong fascination
for me, I really sort of wanted to pursue that.
Now that’s a very broad topic,
and so I started to just do a lot of research,
and a lot of connections was one
of the wonderful parts of Harvard.
They used to have a book that you could literally open
and call people, alumni that were willing.
They were in the field of energy
that they were willing to take a call from.
– The manual LinkedIn.
– Exactly, I had to physically go to an office
to take down numbers and started to sort of piece together
a thesis, if you will, about what the energy landscape
was gonna look like, and even then,
you could see costs coming down on wind and solar.
They were very high compared to where they are today,
but the trend was definitely pointing
in the right direction and steep, right, steep down.
And so I sort of made a sector bet.
I basically just bet vocationally
that it would be an interesting field,
and it felt very relevant and needed
to have compelling types of energy storage
to take those renewable resources
that were coming down and cost so quickly.
Basically, I just said to myself,
I bet at some point batteries
will become relevant on the grid, and that’s what I did.
So I went to a company straight out of Divinity School
and we picked up my master’s in theology
and went to go work for a battery company,
and then that was in New York,
and then a few years after that,
I ended up at Tesla in 2009,
where I started what became the Tesla energy effort,
taking the lithium ion batteries out of the car,
and really, for the first time,
putting them on the electric grid.
– You worked closely with JB Straubel,
who was the co-founder of Tesla,
I believe you were working with Elon Musk too.
What were some of the learnings
from being on that rocket ship?
I mean, it sounds like,
I love you say you made the sector bet.
We often talk in this podcast about
riding the right wave,
picking the wave and then just riding through it.
You did that with that sector,
and you also did that with a company.
You went from a smallish startup
to one of the largest and most influential companies
in the world.
What was that experience like?
– Well, at the time in 2009,
it was definitely not one of the learnings,
in a most influential,
in fact, there was a Tesla death watch, right?
There was this website that was trying to predict
exactly when Tesla would fail,
because so many people were sure it was gonna fail.
So absolutely, it was a different moment for the company
and for the electric vehicle movement in general.
But it was, I could not think of a better place to go.
It was also that Tesla was like a shining light.
For folks who really wanted to work
on the hardest, most impactful problems,
Tesla just was like,
it was like moths to a flame for that place.
And so, Elon rightly deserves a lot of credit
for the vision that he set and the ambition of his goals,
which were just completely inspiring.
And the quality of the people that ended up showing up
is unparalleled, just spectacular.
And so, I got to work with JB
and I got to work with Elon and a bunch of other colleagues,
Drew, Beck Lino, and I could list many, many names there.
And some of the key learnings were go after hard problems,
you’ll get the best people to work on them, right?
It’s a little counterintuitive.
Like great people don’t want to work on mediocre challenges.
They want to work on hard problems.
They want to work on, in fact, the hardest problems.
And if you pick the right ones
and you set ambitious goals,
in some ways you end up with a self-fulfilling prophecy
on that in terms of the type of talent
you can bring into the company.
Now, getting high quality folks into the company
that’s step one, you’ve got to continue to motivate them
and drive them in the right way and everything else.
But absolutely, I saw that play out
to the company’s benefit time and time again
in those early days of Tesla.
As we went, from my time there,
from about 300 to 30,000 people, it was quite the sweep.
So that was certainly a key learning.
Go after the big stuff that matters, why not?
– But it wasn’t enough to keep you.
And then eventually you started your own company.
Why did you decide to do that?
– Well, as much as I saw that Lithium-Ine
very clearly back in 2009 when I joined Tesla
was going to be the next thing to come into the grid
in a meaningful way and have a big impact.
It also became clear over my time there
that Lithium-Ine was not the end all,
be all for energy storage on the grid.
And that was increasingly clear
as I talked to utility executives
while I was building up the Tesla energy business there.
They would describe these other challenges
that Lithium-Ine was just not gonna be able to meet.
Additionally, seven and a half years roughly
is enough time for me to spend at Tesla.
That’s a, you may have heard, it’s an intense place to work.
And so I love to work hard.
I love to work on what I feel matters.
And I’m also married and I got three kids.
And that was, I want to stay married
and be my kid’s life in the right way.
And so for me, that was enough.
And it was enough for me that it was enough.
I didn’t have to keep staying there.
And I also wanted to leave on good terms.
Everybody has a time at which it’s time
for them to leave Tesla.
And I saw a moment and I just said,
now’s a good time, right?
I did exactly what I wanted to do.
I started the Tesla energy effort and got it stood up.
And I’m super proud of the business that is today
and the role that I played early on.
It’s a great business.
And there were more things I still wanted to do,
specifically for energy storage,
precisely because I made a sector bet, not a company bet.
And so I saw more runway there and more opportunity
and frankly, more fun to go back to an earlier stage
and start something.
And I didn’t know that at the time when I left Tesla,
but that’s very quickly where my brain went to
’cause I’ve been in the industry 20 years now.
It turns out I’m not very good at thinking about much else
other than energy storage for the electric grid.
So it was sort of a natural inevitability, I suppose.
And I also should say that I had never founded anything
when I became a co-founder of Form and before.
I had started a company just on my own
that ended up merging to become Form.
But at the same time, I was 40 years old,
I also knew exactly what needed to be done.
And so, I had zero doubt.
I needed some encouragement from close friends
and more importantly, my wife to take that step.
You do have to sort of take that very first step
and say I’m gonna be a founder on something,
do the incorporation and push a board,
make the mental commitment to go do that.
But I also had, once I did take that step with that support,
I also knew exactly what needed to be done.
And I still feel that way.
I see very clearly the path in front of the company.
And that’s because I’ve been doing this for a long time
and I’ve seen good, I’ve seen bad,
I’ve seen different ways to do things.
And I think I’ve got a pretty good sense now
for what works, not just for the industry,
how to go build a business, energy storage specifically,
but also for how to build an organization.
– You mentioned that you were a co-founder
and that the company merged.
It’s a very interesting story.
I mean, the original company you created
was a different company called Verse Energy.
And then you ended up combining it
with what I would call a competitor.
I mean, it was this research team out of MIT,
headed by this guy, Yetmit Chang,
who’s now your chief science officer.
I believe his whole team is pretty much
on your founding team.
Why did you decide to combine with someone else,
specifically someone who was working on the same problems
and thus competing with you?
– Yeah, this was maybe a benefit of the age
that I was when I started it.
At some point, you realize that sublimating the ego
is in your own benefit.
And I’d been before Tesla,
I’d been at a failed battery company.
We basically didn’t do anything after working hard
for almost five years at that entity.
And I wanted to make sure we gave ourselves
every possible chance to succeed.
And that included having multiple technical shots on goal
and having people around the table
from the very beginning
that had been through this before.
And so not just yet,
but my other co-founders, Marco, Ted and Billy,
we’ve all been in batteries before.
This was nobody’s first time around the block.
And so having the collected decades of knowledge
and wisdom and hard earned scars
was just too compelling to pass up.
And we had more than one technical shot on goal.
I had identified iron arrow on my own,
but we didn’t know at the time
that that was gonna succeed at all, right?
And so in the world, starting at this stage
that we did of novel R&D
and early stage commercialization,
inevitably there are several cars that you turn over
that’s either say, says, or it’s zeros.
And we’re lucky enough that on iron air,
we turned over enough of those early on to say,
yeah, this is the one that’s gonna be,
but you just never know.
As a friend of mine says,
sometimes the universe works the way that you want it to,
but you don’t know that going in, right?
And so bringing five co-founders,
which is an unusually large number of co-founders
made complete sense to us at the time
because we all got along very well, it turns out.
And we’re all still in the company.
We’re all still pulling hard on the company.
It’s now a huge advantage.
We’re 750 people and we have five founders
throughout all parts of the company
that represent the founder mentality
that are completely committed to the success of this company.
And so I can’t imagine doing it any other way,
being a sole founder in this kind of enterprise.
It’s just, it’s really, really hard.
None of it has been easy.
We’ve benefited from a ton of really hard work
and super smart people and some luck along the way.
None of it easy or given, frankly.
And so any company is sort of imprinted by its founders.
And I can’t imagine a better set of four co-founders
to be with on this journey from the very beginning.
– Yeah, I’ve heard you say elsewhere
that you don’t consider yourself
one of these kind of charismatic salesman visionary,
what I would call, say like an Elon Musk, Steve Jobs type.
And I personally, I find that refreshing
and the way that you describe it,
it sounds like from the very beginning,
what you’ve been leaning on is your expertise.
I mean, from your entire career in the industry
plus teaming up with four other experts in this.
I like it because I feel like there’s just,
there are a lot of leaders in tech right now
who I would say lean on the vision
which can kind of delve into blind confidence.
Which I think we have enough of.
So I’m just interested as a leader,
who do you look up to?
What, who are sort of some of your leaders
that are your role models?
Who do you try to model your behavior off of as a manager?
– Well, first of all, I heartily agree with your sentiment
that we over index to sort of the megafauna CEO founder type.
And I think that there’s just too many other styles
of effective leadership to over index on just one.
And so the one that I bring to the table
is perhaps a little bit more understated to be clear.
What I don’t compromise on is standard of excellence
that we have internally.
And you can drive that in a lot of different ways
to be clear.
And it doesn’t have to be, again,
sort of this megafauna type personality
that’s just hammering people from the down.
We hold each other to very rigorous standards.
And if there’s one sort of management approach
that I take first and foremost,
it’s a very immodest hoarding of talent.
I will completely admit to that.
You need to go after the absolute best people
for absolutely everything you possibly can.
And then hold them accountable, right?
Set the right vision and hold them accountable.
But I also am not a micromanager,
much less as Elon would say, a nanomanager.
I really do want to hire those great people
and then empower them to go do their best possible work.
That understated style comes from my parents,
to be perfectly honest.
I saw them be leaders in their respective fields
using that approach.
And so there perhaps is also an echo,
just a little bit of one,
from the vocation of people who are ordained
in the ministry, in other words,
how do you lead a group with humility,
but still with vision, right?
And still with the driving force.
We’ll be right back.
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We’re back with first time founders.
When we last spoke, there was this one line
that you mentioned to me, which I love,
which you said sort of guides you.
It’s this passage from Proverbs, quote,
“People will perish for lack of vision.”
What does that mean to you?
You know, it’s a stark reminder.
That was written at a time
when people were living in the desert.
And literally, if they didn’t all agree on the vision,
they would die, right?
And the imperative of a clear vision
is as relevant for the group
of the 750 people inside of form
as it was for the people, the Hebrew people
that first wrote that down.
And the company will go away.
It will perish if we don’t have the right vision.
People can go take different jobs.
People can go decide to do something
different with their life.
And if we don’t give them the right vision
and let them know today why they’re working on the thing
that they’re working on
and why it matters in a broader context,
the company will perish.
It’s as simple as that.
And so it’s a stark reminder
of sort of the existential requirement, in fact,
especially if you’re starting something brand new
from scratch, creating a category inside of an industry
that’s relatively nascent, right?
Not to mention a company doing something new
to provide that vision
and to be very clear about why we’re here
and why this group of humans gets together
on a regular basis.
In fact, on a daily basis to work on a common goal.
It’s also a reminder to be humble
in service of that vision, right?
It is not about me.
It’s not about the management team.
It’s about the vision that we’re setting as a company
and the impact that we hope to go have.
It almost goes beyond just the company
because one thing we haven’t mentioned yet is climate.
And, you know, this was one of the main reasons
I assume that you started this.
I mean, much of the upside in your company
is that it will address climate change.
I and our batteries are a way to store energy
without relying on fossil fuels.
And the data is just getting bad and scary.
I mean, one start I pulled here
is that NASA confirmed that 2023 was the warmest year ever.
So, to what extent is the existential threat of climate
also a motivating factor?
In addition to the possibility that your company
as with any company could perish if sales drop off.
– Yeah, that’s a different sort of level
of thinking about perishing, that’s for sure.
But it’s a huge motivator to be clear
and it’s also tied to something I said earlier
which is that cheap abundant energy
underpins human civilization broadly speaking today.
And that fact is not going away.
And so we need to figure out how we will drive
the energy industry forward in a way that solves
for everybody, right, in the end.
And yes, it absolutely means meeting the climate challenges
that we have and the decarbonization challenges
that we have and still providing reliable
low cost abundant energy, no matter what.
And that is not a switch we can flip overnight.
It’s not, nobody has a wand to sort of make things better
immediately, it will take innovation
and it will take innovation at scale
and it will take massive amounts of capital.
I don’t know if you saw this, but roughly
between a hundred and 150 trillion dollars of capital
will go into this broad change that will happen
over the next 40 or 50 years.
It’s a little incredible, like literally incredible, right?
It’s hard to imagine.
And so we need to be able to meet the scale
of that challenge in a lot of different ways.
And absolutely we see that this kind of storage
can be a critical tool to enabling that change to happen
in a way that solves for a lot of people,
meets the climate goals, meets the energy goals,
meets the reliability goals, right,
that we have for this stuff.
And so it’s a huge motivating factor
in the broader context of just the scope
and scale of this industry, this energy industry
and within that the electricity industry
that we happen to work on.
– If there’s one thing that you think
regular people should know about
the state of our climate today.
I mean, I just mentioned last year was very warm,
but I feel like these stats often don’t ring true for people.
I think it’s hard to feel that impending doom.
And I think there’s a lot of psychological research
on that issue, but if there’s one thing
you think people should know about climate today
and where we’re at right now, what would it be?
– Well, I guess I’ll say two things.
One, the volatility of the weather is also increasing.
So that if you look at the incidents,
this is from the NOAA, the National Oceanic
and Administrative Entity that tracks these things.
If you look at the number of multi-day,
highly volatile weather events that are driving
essentially dollars of damage in the United States,
they’re going up pretty significantly.
They don’t have a pithy stat to sort of give to you,
but I’ve seen the chart and it’s definitely open
to the right there.
That’s important to keep in mind.
A changing climate, it means a lot of things.
However, we experience it as weather in the end, right?
And that weather will be more volatile for us.
We’ll have to sort of think about that.
And specifically for a lot of people,
it means water volatility, either too much or too little.
And what that means to civilization is quite important.
Now, the other part of that is,
it’s important to have a sense of agency in this
because sometimes $150 billion or two degrees Celsius
or any of these other things,
they’re sort of so abstract as to be unrelatable.
And I think it’s important to understand
the scope of the challenge.
It seems really, really big.
And remember that humans,
whenever we decide to do something,
we pretty much do it collectively.
Look at every sort of energy transition age
that we’ve been through.
I mentioned the fuel substitution.
That has happened.
We have done it.
We have been in periods before when we said
surely we’re gonna run out of energy.
Surely we can’t keep going in this way.
And you run the numbers in a linear fashion
and that’s all true.
And innovation steps in.
And human will to succeed steps in.
And we’ve seen that pattern over and over and over again.
And so I have a ton of faith based on the evidence
that I see that that will continue to be true
and that we collectively as a civilization
will step up and meet the needs.
And we’ll do that because people from all walks of life
in all ways that they intersect energy broadly speaking
will want that to be true.
– If you had one piece of advice
that you had to give to your former self
when you were starting the company, what would it be?
– Go do it.
I really didn’t know that I was gonna start a company.
And it took me some months to decide whether or not
I mentioned good advice from friends
and support from my wife that were critical to do it.
And it has been harder than expected
to be perfectly honest and more fulfilling at the same time.
And I think you just really never know going into it
what the journey is gonna look like.
And sometimes you just still need that encouragement.
And you sort of would like to ask your future self,
is this gonna be worth it?
And I think the answer unequivocally is yes,
and in different ways than you expect, right?
So go do it.
It’s not that much risk in the end, right?
I think collectively people are probably too risk-averse,
especially when it comes to their vocations.
I’m fortunate I come from a stable family
and they always support me and love me.
But even still, I think professionally,
people take far too few risks.
– Matteo Haramio is the founder and CEO of Form Energy.
Matteo, I would love to talk for hours more,
but I know you need to go build some iron-air batteries.
So we’ll let you go.
– Thanks very much, Eddie.
It was great to chat.
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– Our producer is Claire Miller.
Our associate producer is Allison Weiss.
And our engineer is Benjamin Spencer.
Jason Stavars and Catherine Dillon
are our executive producers.
Thank you for listening to First Time Founders
from the Vox Media Podcast Network.
Tune in tomorrow for Procure Markets.
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Ed speaks with Mateo Jaramillo, Co-Founder and CEO of Form Energy, an energy storage and manufacturing company. They discuss how his experience at divinity school led him to start the company, what his experience working at Tesla was like, and why innovation in energy storage is so imperative to help save the planet.
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